Bank charges

Most banks will tell you that because they won the test case in 2009 they will not be refunding any bank charges, and that this issue is now closed. However the SRC believe that it is incorrect to suggest that bank charges are ‘fair’ or cannot be challenged and have included some template letters and advice below on how you can claim these back.

Following the huge response to our bank charges survey, the SRC has teamed up with Govan Law Centre to produce letters that you can customise to suit your circumstances, and then send to your bank. The letters contain a statement of the law, and give the bank an opportunity to refund your charges voluntarily. The letters also threaten court action if a refund is not made.

Please note these letters have been updated as a result of the outcome of the test case in 2009.

Results of our survey showed that many of you are being charged when a direct debit, standing order or cheque payment is honoured by the bank even although there’s not enough money in the account to cover it. In this case use the Bank Charges Payment Honoured Letter.

For those times when the bank refuses to honour the payment, and still charges you anyway, the letter is slightly different — Bank Charges Payment Declined Letter.

How to use the letters:

  • Decide which letter is relevant to your situation
  • Paste into a Word document and add your own details and information about your situation to customise it
  • Keep a copy of the letter, and send it Recorded Delivery to your bank
  • If the bank hasn’t replied or refunded the charges within 7 days, come into the Advice Centre to discuss raising a small claims action against your bank

At any stage, if you want a bit more advice or information, contact the Advice Centre for further information.

OFT Bank Charges Test Case

Following the UK Supreme Court’s ruling in November 2009, the Office of Fair Trading has decided to drop its investigation into the fairness of bank overdraft charges.

For the last couple of years, all complaints about unfair bank charges have been put on hold by UK banks and the Financial Ombudsman Service (FOS) pending the outcome of the OFT’s test case. Since the case has now concluded and the OFT lost, it is likely that if you have an on-going complaint (one that had been on hold) against a bank, it will be rejected unless you amend your complaint.

Most banks will now tell you that because they won the test case they will not be refunding any bank charges, and that this issue is now closed. However, the SRC and the Govan Law Centre believe that it is incorrect to suggest that bank charges are ‘fair’ or cannot be challenged. This is because the OFT lost the case on a technical point and a consensus remains that bank charges are legally unfair and excessive.

Indeed, the UK Supreme Court made it clear that “it remained open to question whether bank charges were fair” in relation to the Unfair Terms in Consumer Contract Regulations.

If you have an ongoing complaint about bank charges, which you now wish to amend, please have a look at the sample letters provided above.

For more information or to discuss your own case, please contact the Advice Centre.